Sales and Distribution (SD)

Curriculum: Introduction to S/4HANA using Global Bike

Teaching material - Information

i Teaching material - Version

 3.3 (May 2019)

 Software used
• S/4HANA 1809
• Fiori 2.0
 Model
• Global Bike

 Prerequisites
• No Prerequisites needed

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Module Information

Authors

 Bret Wagner
 Stefan Weidner
 Babett Ruß

Target Audience

 Beginner

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Module Information

Learning Objectives

 Understand an integrated order-to-cash cycle

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Functionality

 Sales

 Shipping and Transportation

 Billing

 Credit Management

 Foreign Trade

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Unit Overview

 SD Organizational Structure

 SD Master Data

 SD Processes
• Order-to-Cash Process

 Innovations in S/4HANA

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SD Organizational Structure

 Client
• An independent environment in the system

 Company Code
• Smallest org unit for which you can maintain a legal set of books

 Credit Control Area

• An organizational entity which grants and monitors a credit limit for customers.
• It can include one or more company codes

 Sales Organization
• An organizational unit responsible for the sale of certain products or services.
• The responsibility of a sales organization may include legal liability for products and customer claims

 Distribution Channel
• The way in which products or services reach the customer
• Typical examples of distribution channels are wholesale, retail, or direct sales

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SD Organizational Structure

 Division
• A way of grouping materials, products, or services

 Sales Area
• Combination of Sales Organization, Distribution Channel and Division
• Determines conditions (i.e. pricing) for sales activities

 Plant (here: Delivering Plant)

• Plant from which the goods should be delivered to the customer

 Other SD organization units:

• Shipping Point
• Loading Point
• Sales Office
• Sales Group
• Sales Person

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GBI Structure for Sales and Distribution

Global Bike Client

Company
Global Bike Inc. Global Bike Germany GmbH Code

Sales
US West US East Germany North Germany South Organization

San Diego Dallas Miami Hamburg Heidelberg Sales Office

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GBI Enterprise Structure in SAP ERP (Sales)

Distribution Channel Wholesale WH

Distribution Channel Internet IN

US West CA West DE North GB North AU North

UW00 CW00 DN00 GN00 AN00
US East CA East DE South GB South AU South Sales
UE00 CE00 DS00 GS00 AS00 Organization
CC US00 CC CA00 CC DE00 CC GB00 CC AU00 Company Code

Credit Control Area (global) GL00

Client GBI

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SD Master Data

Customer Master

Material Master

Sales Condition

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Customer Master Data

 Customer Master
• Contains all of the information necessary for processing
orders, deliveries, invoices and customer payment
• Every customer MUST have a master record
 But you can have one time customers

 Created by Sales Area

• Sales Organization
• Distribution Channel
• Division

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Customer Master Data

 The customer master information is divided into 3 areas:

• General Data
• Company Code Data
• Sales Area Data

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Material Master Views

Sales Data

Basic Data Purchasing Data

Mat. Plan. Data

Material Master Forecasting Data

Storage Data

Controlling Data Quality Data

Accounting Data

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Material Master

General Information relevant for the entire organization:

Name
Weight
Client XXX Unit of Measure

Sales specific information: Storage Location specific information:

Delivering Plant Stock Qty

Loading Grp
Sales Org. UW00 Storage Loc. FG00

Sales Org. UE00 Storage Loc. TG00

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Condition Master Data (Pricing)

 Condition master data includes:

• Prices
• Surcharges
• Discounts
• Freights
• Taxes

 You can define the condition master to be dependent on various

data:
• Material specific
• Customer specific

 Conditions can be dependent on any document field

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Output

 Output is information that is sent to the customer using

various media, such as:
• E-mail
• Mail
• EDI
• XML

 Output examples:
• Quotation
• Confirmation
• Invoice

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Sales Order Process

Pre-sales Sales Order

Activities Entry

Check
Availability

Pick
Materials
Receipt of
Customer Payment
Pack
Invoice Materials
Customer
Post Goods
Issue
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Pre-Sales Activities (CRM Light)

 Sales Support is a component of SD that assists in the sales, distribution, and marketing of a companies
products and services to its customers. It contains the following functionality:
• Creating and tracking customer contacts and communications (sales activity)
 Phone call records
 On-site meeting
 Letters
 Campaign communication
• Implementing and tracking direct mailing, internet, and trade fair campaigns based on customer attributes

 Pre-sales documents need to be managed within the presales activities: Inquiries and Quotations. These
documents help identify possible sales related activity and determine sales probability.

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Pre-Sales Activities (CRM Light)

 The ultimate goal of all pre-sales activities is to equip the

sales technician with all the information necessary to
negotiate and complete the potential sale.

 Information needed:
• Past sales activity
• Past communication
• Contact information
• General Company info
• Credit limits and usage
• Current backorders

 360º view of your customer

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Inquiry

 An inquiry is a customer’s request to a company for

information or quotation in respect to their products or services
without obligation to purchase.
• How much will it cost
• Material/Service availability
• May contain specific quantities and dates

 The inquiry is maintained in the system and a quotation is

created to address questions for the potential customer.

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Quotation

 The quotation presents the customer with a

legally binding offer to deliver specific
products or a selection of a certain amount of
products in a specified timeframe at a pre-
defined price.

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Sales Order

 Sales order processing can originate from a variety of documents and activities
• Customer contacts us for order: phone, internet, email
• Existing Contract
• Quotations

 The electronic document that is created should contain the following basic information:
• Customer Information
• Material/service and quantity
• Pricing (conditions)
• Specific delivery dates and quantities
• Shipping information
• Billing Information

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Sales Order

 The sales document is made up of three primary areas:

• Header
 Data relevant for the entire sales order: Ex: customer data, total cost
of the order

• Line Item(s)
 Information about the specific product: Ex: material and quantity,
cost of an individual line

• Schedule Line(s)
 Uniquely belongs to a Line Item, contains delivery quantities and
dates for partial deliveries

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Sales Order

 The sales order contains all of the information needed to process your customers request, the following
information is determined for each sales order:
• Delivering Schedule
• Shipping point and route determination
• Availability Check
• Transfer of requirements to MRP
• Pricing
• Credit limit check

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Delivery Scheduling

 When an order is created you must enter a requested delivery date for the order or each line item.

 The system will then determine a delivery timeline, this will be used when determining our material availability,
or ATP (Availability to Promise) date.

 The system will determine this date using forward and backward scheduling rules you have defined.

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Backward Scheduling

Order Material Transp. Goods Requested

Date Availability Sched. Loading Issue Delv. Date
1st 2nd 3rd 4th 5th 6th

Pick & Pack Transit

Transp. Loading
Time Time
Sched. Time
(2 days) Time (1 day) (2 days)
(1 day)

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Forward Scheduling

Requested New
Order Material Transp. Goods Delv. Delv.
Date Availability Sched. Loading Issue Date Date
1st 2nd 3rd 4th 5th 6th 7th
Transp. Loading Transit
Pick & Pack Sched. Time Time
Time (2 days) Time (1 day) (2 days)
(1 day)

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Shipping & Route Determination

 During the creation of the sales order the system must determine the shipping point from which the material will
be shipped and the route the material will take to get from your warehouse to your customers location.

 A shipping point is determined for each line item within the order.

 The route determination is used to define the transit time of the material that we used in scheduling.

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Availability Check

 Availability Check
• Determines the material availability date
• Considers all inward and outward inventory movements
 Proposes 3 methods of delivery
• One-time delivery
• Complete delivery
• Delayed proposal
 Rules are created by YOU

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Pricing

 The system displays pricing information for all sales documents on the pricing screens at both the header and
the line item level.
• Header pricing is valid for the whole order and it is the cumulative of all line items within the order
• Line item pricing is for each specific material.

 The system will automatically search for price, discounts, surcharges, calculate taxes and freight. You have the
ability to manually manipulate the pricing at both the header and line item level within the sales order by entering
a condition type and amount.
• Taxes and freight can be set-up so we can’t manually enter them

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Credit Check

 Allows your company to manage its credit exposure and risk for each customer by specifying credit limits.

 During the sales order process the system will alert the sales rep about the customers credit situation that
arises. If necessary, the system can be configured to block orders and deliveries.

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Shipping & Transportation

 The shipping process begins when you create the delivery document for the sales order. This document
controls, supports, and monitors numerous sub-processes for shipping processing:
• Picking
• Packing
• Post Goods Issue

 Integrated with the Material Management (MM), extended Warehouse Management (eWM) and Finance (FI)
modules

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Shipping

Sales Order 1 Sales Order 4 Sales Order 5

Sales Order 2 Delivery 8…13 Delivery 8…16

Sales Order 3 Delivery 8…14

Delivery 8…12 Delivery 8…15

Order Partial Complete

Combination Delivery Delivery

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Delivery Creation

 Checks order and materials to determine if a delivery is possible — delivery block (hold), completeness

 Confirms availability

 Confirms export/foreign trade requirements

 Determines total weight & volume

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Delivery Creation

 Generates packing proposal

 Calculates weight and volume
 Checks scheduling
 Considers partial deliveries
 Updates route assignment
 Assigns picking location
 Updates sales order
 Determines batches
 Quality check (if needed)
 Updates sales order

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Delivery Document

 The Delivery Document initiates the delivery process and is the control mechanism for this process
• Picking
• Packing
• Loading
• Posting Goods Issue

 Changes to delivery are allowable - products, quantities

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Picking

 Quantities based on delivery note

 Assigned date when picking should begin

 Automated storage location assignment

 Supports serial number/lot number tracking and batch management

 Integrated with Warehouse Management (WM)

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Loading and Packing

 Identifies which packaging is to be used for specified products (customer preference and UCC-128
considerations)

 Identifies and updates accounts associated with returnable packaging

 Tracks the packed product by container

 Insures weight/volume restrictions are enforced

 All packed items are assigned to the required means of transportation

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Goods issue

 Event that could indicates the legal change in ownership of the products
• it's recognition that the goods have left the premises of the seller. Legal change in ownership depends on the Incoterm and
what's in the sales order terms and conditions.

 Reduces inventory and enters Cost of Goods Sold

 Automatically updates the General Ledger (G/L) accounts

 Ends the shipping process and updates the status of the shipping documents

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Billing

 The billing document is created by coping data from the sales order and/or delivery document.
• Order-based billing
• Delivery-based billing

 The billing process is used to generate the customer invoice.

 It will update the customer’s credit status.

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Billing Documents

 The billing document will automatically create a debit posting to your customer sub-ledger account and credit
your revenue account.

 It is at this point that the sales process is passed over to Financial Accounting to await payment.

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Billing Methods

Delivery 8…20 Invoice 9…45

Delivery based Order 6
Invoicing Delivery 8…21 Invoice 9…46

Delivery 8…33
Collective Order 9
Delivery 8…34 Invoice 9…68
Invoicing
Order 14 Delivery 8…56

Invoice 9…91
Split
Order 32 Delivery 8…86
Invoicing
Invoice 9…92

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Payment

 Payment is the final step in the sales order process, this step is managed by the Financial Accounting
department.

 Final payment includes:

• Posting payments against invoices.
• Reconciling differences between payment and invoice.

 Payment will create a posting clearing the liability in the A/R account and increases your bank account.

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Document Flow

 The document flow and order status feature allows you to find the status of an order at any point in time. The
SAP updates the order status every time a change is made to any document created in the customer order
management cycle (Order-to-Cash).

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Sales Order Process Debugging

“Never again did I learn so much in such a short time,

because twenty participants made mistakes for me! You
cannot make so many mistakes all alone”

SAP Co-founder Klaus Tschira

on his experiences teaching COBOL
to clients at IBM

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Sales Order Process Debugging

 Document Flow
• Gives Order Process Status

 List of Sales Orders (VA05)

• Tool to Find Order
• Need student’s user id/data set number

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Innovations in SAP S/4HANA
Focus Sales and Distribution in GBI

1) Business Partner (BP) is the Single Point of Entry for master data such as customer, vendor, contact person
Transaction BP replaces FD01, FD02, FD03, FD05, FD06, FD0 FK01, FK02, FK03, FK05, FK06, FK08 MAP1, MAP2, MAP3 MK01,
MK02, MK03, MK05, MK06, MK12, MK18, MK19, V-03, V-04, V-05, V-06, V-07, V-08, V-09, V-11, V+21, V+22, V+23, VAP1, VAP2,
VAP3 VD01, VD02, VD03, VD05, VD06 XD01, XD02, XD03, XD05, XD06, XD07 XK01, XK02, XK03, XK05, XK06, XK07

2) Credit Management has to be initialized in S/4HANA to perform processes in distribution

3) Simplification in SD Analytics
No aggregates are formed via data for analytical processes. S/4HANA analyzes are based on ODATA and Open CDS (Core Data
Services). These data are stored directly on the database and they grow there over time.

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Innovations in SAP S/4HANA
Business Partner

 The core function of SAP S/4HANA is the simplification of data structures

various transactions, such as the management of customers or creditor, are summarized
 It is (so far) still possible to navigate through the well-known tree paths

A unique business partner number is assigned to customer 13000. This

business partner number is assigned to various roles such as the
customer, creditor or contact person.
Relationship: n:m

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Innovations in SAP S/4HANA
Business Partner

 There are redundant object models in the traditional ERP system where the vendor master and
customer master is used.
• The (mandatory) target in SAP S/4HANA is the Business Partner approach.
 Business partners can be categorized as a person, group, or organization as follows:
• An organization represents units such as a company (for example, a legal person), parts of a legal entity (for
example, a department), or an association. Organization is an umbrella term to map every kind of situation in the
day-to-day business activities.
• A group represents a shared living arrangement, a married couple, or an executive board.

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Innovations in SAP S/4HANA
Credit Management

 In contrast to ERP, the component Credit Management (FI-AR-CR) is not available as part of
S/4HANA.
 Equivalent: SAP Credit Management (FIN-FSCM-CR)
• In ERP there was the possibility to not use the function FI-AR-CR, but FIN-FSCM-CR has to be initialized.
• It helps companies to identify the risk of loss of receivables against their business partners at an early stage, and
to make credit decisions efficiently and partially automated.
 Recommended for:
• Companies with a high number of business partners
• Companies that want to merge internal and external data of a business partner into an own credit assessment or
evaluation.
• Companies that have an extremely distributed system landscape often have
problems with the consolidation of information on the purpose of credit decisions

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Innovations in SAP S/4HANA
Simplification in SD Analytics

 Analyzes are based on ODATA and Open CDS (Core Data Services)
 stored directly on the database Data grow there over time
 SD specific business objects such as Sales Order, Customer Invoice, Outbound Delivery and many
others in the data base tables VBAK, LIKP and VBRK are represented by CDS views that regulate
uniform access to analytical views
• Is achieved by semantic field names to connect business objects such as customers, materials, etc
• Predefined analytical view of the CDS queries allows the report to be executed directly on the database, without
preformed aggregates
Groupings and filters on the fly

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Thank you!